“It is becoming appallingly obvious that our
technology has exceeded our humanity.” — Albert Einstein
“Productivity is marvelous, and those workers who are let go, simply become assimilated into the economy.” — John Kenneth Galbraith
The debate is on — a scientist vs. an economist. Einstein’s quote is well-known; however, Galbraith’s quote is unfamiliar. As a matter of fact, only one person heard Galbraith make this statement, and that was yours truly as a freshman at George Washington University in 1964 (after class.) As much as I respected, continue to respect, and yet respectfully disagree with the Keynesian guru of economics, I believe that the debate has been clearly won by the scientist. Here’s why.
Every great invention or innovation, from the internal combustion engine to the cell phone, has created an initial burst of production, which in its infancy has required able-bodied workers — individuals receiving wages to be spent within the local community.
Back in the heyday, in order to produce Kodak cameras and film, it required thousands of dedicated employees. In addition, the advent of the individual window air conditioner required hundreds of robust employees who shared the same goal of assembling and distributing the product. And the list goes on and on.
Nevertheless, after that initial surge of enchantment, competition sets in and margins are closely examined. Technology then rides to the rescue which eliminates the common worker, replacing them with — in its most simplistic description — a robot. Indeed, the argument will be made that the worker is being replaced by a cheaper counterpart in another area of the world. However, even in those other areas, technology is coming to the forefront, as exemplified by Japan. From film to digital, and from mere window air conditioning to central home air conditioning, as products are invented or created, and then mature into a fifth or sixth version, the need for human workers becomes less and less.
Thus, very important questions need to be answered. What will be the next great discovery? Will it be a revolutionary event, similar to the launch of the internal combustion engine, the radio, or the internet? And if so, will this greatly anticipated groundbreaking occasion fill the need for the masses, subsequently giving rise to jobs?
Along with his 40-years of dedication in the financial services industry, Bill is the President and CEO of GPSforLife, has recently authored a highly successful book entitled 44th: A Presidential Conspiracy, publishes his dynamic monthly financial newsletter MacroProfit, and faithfully continues his third decade on the radio with It’s All About Money, which can be heard weekdays on Money Radio in Phoenix and in podcast form on his website (and on smartphone apps) published at billtatro.com weekdays at 5pm Eastern. Bill can be reached via email at firstname.lastname@example.org and on Twitter @tatroshow.